Tamil Nadu

StateCommission

CC/57/2007

M/s.Vanjax Sales Pvt. Ltd., Rep. by its Director Mr.Daniel - Complainant(s)

Versus

The Branch Manager, New India Assurance Co.Ltd., - Opp.Party(s)

Rank Associates

18 Oct 2022

ORDER

                                                                        Date of filing : 25.10.2007                                                                                                                                                                                                                                                                              IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:  Hon’ble THIRU. JUSTICE R. SUBBIAH  : PRESIDENT

                             Thiru R  VENKATESAPERUMAL : MEMBER

 

 

C.C.No.57 of 2007

Tuesday, the 18^th day of October 2022

 

M/s. Vanjax Sales Pvt. Ltd.,

343, SIDCO Industrial Estate

Ambattur

Chennai – 600 098.

Rep. by its Director

Mr. Daniel                                                           .. Complainant

 

 

- Vs –

 

The Branch Manager

New India Assurance Co. Ltd.,

Unit No.712701

Casa Blank I Floor

No.6, Casa Major Road

Chennai – 600 008.                                            .. Opposite Party

         

 

 Counsel for the Complainant         :  M/s.Rank Associates

                                                      

 Counsel for the Opposite party      : M/s. M.B. Gopalan Associates

 

 

This complaint came before us for final hearing on 12.07.2022 and on hearing the arguments of the counsel for the opposite party and on perusing the material records, this Commission made the following :-

O R D E R

 

R.SUBBIAH J., PRESIDENT

             This complaint has been filed by the Complainant under Sections 17 & 18 of the Consumer Protection Act, 1986 praying to direct the opposite party, to pay the claim amount of Rs.22,00,000/- ; and to interest at the rate of 18% per annum from the date of claim ;

 

          2.     In brief, the case of the complainant as projected in the Complaint is as follows:  

     The complainant is in the business of manufacturing various hydraulic jacks and material handling equipments.  The complainant’s company comes under the category of ‘Small Scale Industries’.  The opposite party is the insurer of the complainant for the past several years, covering their entire business premises, Plant & Machinery, stocks etc., under Standard Fire and Special Risks Policy, which includes the risk of flood.  Such policy was taken under Policy No.712701/11/05/00151 covering the period from 19.06.2005 to 18.06.2006.  During October 2005, Chennai city and its suburbs received heavy rains of unprecedented nature, flooding in various parts, including the complainant’s factory and attached office premises.  Such a heavy down pour resulted in flooding of the entire factory premises on 27.10.2005 and continued to be under the effect of deluge till 10.12.2005.  The complainant’s premises was totally flooded and all the plant, machinery and stocks, which are the subject matter of insurance, were totally lost, resulting in loss of all the insured items.  It compelled the complainant to suspend the work during that period.  The complainant informed the opposite party about the loss of the subject matter by submitting a claim form.  In usual course, the opposite party appointed a Surveyor, namely, M/s.Bhatawadekar & Co., Adyar, Chennai to process the claim.  The said surveyor made several rounds of visits/ inspection and was asking for information in piecemeal manner from time to time, adding agony to the complainant and also caused delay in settlement of the claim.  There was no progress in the claim processing and the surveyor was inadequate in processing the claim.  He adopted in-transience and dilatory attitude. He just kept on dwelling for documents/ proof in a vague manner and thus could not take the claim to its final logical processing stage.  The complainant fully co-operated with the surveyor and even carried out repairs of certain items, which may contribute to the reduction in the quantum of claim.  Finally, the complainant sent a letter to the surveyor on 22.03.2006, explaining in detail the manner in which they have co-operated with him in processing the claim and the need for speedy settlement of the claim, without any more delay.  But, the opposite party did not come forward to settle the claim.  The complainant was totally frustrated with the unhelpful attitude of the surveyor and issued a legal notice dated 04.10.2006 calling upon the opposite party to pay the claim amount of Rs.22,00,000/- within a period of 15 days from the date of notice.  The said notice was replied by the opposite party, through their counsel reiterating the vague plea that the complainant has not furnished the details and other records as required by the surveyor.  On 10.03.2007, the complainant again wrote to the opposite party stating that even as on the said date, the opposite party had neither repudiated the claim nor quantified the claim, based on the documents/ receipts and other documents produced by the complainant.   Hence, finally the present complaint has been filed against the opposite party, for the reliefs as aforementioned.

 

             3. The Opposite party resisted the Complaint by filing a Written Version, wherein, among other things, it is stated thus:-

             The complainant had availed Standard Fire & Special Perils Policy for the period commencing from 19.06.2005 to 18.06.2006, covering Building, Plant & Machinery and various specified items of stocks for a total sum insured of around Rs.1.5 crores.  The cover was granted subject to terms and conditions stipulated in the policy.  The complainant had reported a claim for damage due to flood in their premises on 09.11.2005.  Immediately, the opposite party had appointed M/s. Bhatawadekar & Co., duly licensed, qualified and independent surveyor to verify and assess the loss.  The surveyor had immediately visited the premises and advised the complainant to submit their detailed claim with supporting materials and proof for the amount claimed.  The complainant was also required to keep a record of the repair works carried out.  The opposite party relies on Condition No.6 of the Fire Policy.  On 12.01.2006, the complainant submitted a claim form claiming Rs.22 lakhs along with an estimate but without any supporting documents.  The claim was made for various items of damage and for alleged repairs as detailed below :-

Annexure I  pertaining to stocks               40 items   Rs. 6,49,148/-

Annexure II pertaining to stocks              23 items   Rs. 9,57,220/-

Annexure III pertaining to RM stock         42 items   Rs.    66,913/-

Annexure IV pertaining to

                     Bought out components      136 items Rs.    47,078/-

 

Annexure V pertaining to

                     Furniture and Fixtures        14 items   Rs.    28,026/-

 

Annexure VI pertaining to building           5 items     Rs. 2,36,280/-

 

Annexure VII pertaining to RM Stock                        Rs. 3,05,834/-

                                                                             ____________

                                                                             Rs.22,90,500/-

                                                                             =========

 

Most of the items were in the state of repair and essentially it was the cost of repairs/ rectification, if any, which could be considered as the loss.  However, no bills or supporting documents were submitted in proof of the loss and there was no proof for the actual costs incurred.  Apart from establishing the cost of repairs by proper proof, it is necessary to ascertain the actual quantity and value of the total stocks and other property held by the complainant for the purpose of verifying the adequacy of insurance and the under-insurance if any.  Hence, the surveyor required proof to assess the actual cost of repairs and also the value of property at risk prior to the flood.  The surveyor cannot independently estimate the loss and the admissible quantum without submission of a claim and proof which is the fundamental basis for the whole exercise.  The complainant was obliged to furnish not only the claim but also proof for the same.  The claim for Rs.22 lakhs being alleged damage to various items of the insured property cannot be admitted or assessed merely on the estimate of the complainant.  Therefore, by letter dated 23.01.2006, the surveyor called upon the complainant to submit,

1. Supporting documents for the estimate of repair/replacement claimed.
2. Stock on the date of occurrence with supporting documents.  The stock statement if furnished to Bank.
3. Salvage value of damaged items.

However, the complainant had failed to furnish the required documents.  On the other hand, the complainant started engaging in a confrontationist attitude of questioning the basis of the surveyor’s request as if the assessment could be made without the documents.  On 12.05.2006, the complainant informed that they were in the process of preparing the supporting documents.  Whileso, the complainant once again raised an issue that the requirement of the documents amount to suspecting the claim, in an apparent attempt to avoid complying with the reasonable request of the surveyor for proof of the amount claimed.  Ultimately, on 21.07.2006, the complainant had forwarded Stock Statement, Balance sheet, Plant & machinery list and repair work details of Director’s cabin with 23 bills, which however constituted a negligible portion of the claim of Rs.22 lakhs.  The total value of the bills produced was Rs.1,01,526.50.  Some of the bills were dated November 2005 itself, when the whole premises were stated to be submerged in flood.  Hence, the surveyor was forced to request for proof of repairs/ loss in respect of the items actually stated to have been damaged.  But the complainant has not come forward to furnish the same and hence the surveyor was unable to make any assessment.  The complainant had miserably failed to establish the huge claim of Rs.22 lakhs with any valuable evidence.  Thus, the opposite party sought for dismissal of the complaint. 

 

      4.  In order to prove the case, the complainant, along with proof affidavit, has filed 35 documents and the same have been marked as Ex.A1 to A35.   On the side of the opposite party, proof affidavit has been filed and 6 documents were marked as Ex.B1 to Ex.B6.

 

             5.  When the matter was taken up for consideration, the counsel for the complainant made a detailed submission adverting to the averments in the complaint.  It is the main contention of the counsel for the complainant that it is incorrect to state that no bills or supporting documents were submitted in proof of the amount claimed by them.  The complainant had produced all stock statement, balance sheet, plant & machinery list, repair work details, bills etc., to enable them to arrive at the cost of repairs and the value of the property prior to the flood.   Inspite of producing the said documents, the claim has not been settled.  It is also incorrect to state that the surveyor was unable to estimate the loss and damage based on the documents submitted by the complainant.  As against the insured amount of Rs.1,46,02,000/-, the claimant has made a claim only for Rs.22,00,000/- based on the loss and damage happened to the complainant by floods.  Now it is the onus of the opposite party to disprove the claim made by the complainant with evidence, if any.   Without disproving the claim, the opposite party is precluded from alleging that the insured property cannot be admitted or assessed merely on the estimate of the complainant.  A reading of the status report filed by the opposite party would show the persistent nature of the surveyor in demanding the documents from the complainant, ignoring the fact that the complainant had supplied all documents in their possession and also the fact that the complainant was reeling under tough time soon after the flood.  Thus, the complainant submitted that there is no justification in rejecting the claim made by them.  Thus, there is deficiency of service on the part of the opposite party and hence prayed for allowing the complaint.  

 

             6.  Countering the submission of the complainant, the opposite party had filed written arguments and counsel for the opposite party made a detailed submission referring to Condition No.6 of the Fire Policy.  Learned counsel further submitted that it is false to state that all the documents required by the surveyor was furnished by the complainant.  The complainant miserably failed to establish the huge claim of Rs.22 lakhs with valuable evidence.  In this regard, learned counsel also relied upon the judgment of the Supreme Court in the case of United India Insurance Co. Ltd., Vs. Kantika Colour Lab & Ors., reported in (2010) 6 SCC 449, in support of his case.

 

             7.  Keeping in mind the submissions made on either side, we have carefully gone through the materials available on record. 

 

             8.  Though very many contentions have been raised in this complaint, the only question that arises for consideration is, Whether the complainant has established that they have suffered loss to the tune of Rs.22,00,000/- in the floods.  In October 2005, there was a heavy loss to the complainant’s factory and attached office premises, due to heavy rain in Chennai City.  In the said heavy rain, the complainant’s premises were totally flooded and all the plant, machinery and stocks were totally lost.  Since, they were having insurance coverage to a tune of Rs.1,46,02,000/-, they have made a claim for Rs.22,00,000/-.  But the surveyor, namely, M/s.Bhatawadekar & Co., who was appointed by the opposite party, made several rounds of visits/ inspection/ discussion during those days.  The surveyor was keeping on asking information in piecemeal manner but there was no progress at all.   The surveyor, not knowing what to do, kept on asking for documentary proof in a vague manner.  Inspite of the same, the complainant has furnished all the necessary documents to him.  However, the claim of the complainant was neither repudiated nor quantified and hence he has to approach the Consumer Forum.  But, it is the submission of the opposite party that a bare claim cannot be admitted or assessed by the surveyor or paid by the opposite party.  The claim of the complainant should be supported by documents.  In this regard, the attention of this Commission is invited to Condition 6 of the Policy, which reads as follows :-

                “ 6(i)  On the happening of any loss or damage the insured shall forthwith give notice thereof to the company and shall within 15 days after the loss or damage, or such further time as the company may in writing allow in that behalf, deliver to the company.

1. A claim in writing for the loss or damage containing as particular an account as may be reasonably practicable of all the several articles or items or property damaged or destroyed, and of the amount of the loss or damage thereto respectively, having regard to their value at the time of the loss or damage not including profit of any kind.
2. Particulars of all other insurances if any.

The insured shall also at all times at his own expense produce, procure and give to the company all such further particulars, plans, specification, books, vouchers, invoices, duplicates or copies thereof, documents, investigation reports (internal/external), proofs and information with respect to the claim and the origin and cause of the loss and the circumstances under which the loss or damage occurred, and any matter touching the liability or the amount of the liability of the company as may be reasonably required by or on behalf of the company together with a declaration on oath or in other legal form of the truth of the claim and of any matters connected therewith.

No claim under this policy shall be payable unless the terms of this condition have been complied with.

2.  

Further, correspondences exchanged between the parties would show that the surveyor was keeping on asking for documents, such as stock records, purchase bills, bank statements etc.  According to the opposite party, in the documents furnished by the complainant, the bills are only to an extent of Rs.1,01,526.50.  Therefore, the surveyor has submitted a Status report on 13.02.2007 stating his inability to assess the loss in the absence of documentary proof by the complainant.  We find some substance in this submission of the counsel for the opposite party and we are of the opinion that when the complainant has made a huge claim of Rs.22 lakhs, they have to substantiate the same by producing necessary documents.  In the instant case, the complainant has miserably failed to do so.  Furthermore, their contention that since there is an insurance coverage for 1.5 crores, their claim should be allowed, is not legally sustainable.  In this regard, it would be appropriate to refer the judgment of the Supreme Court in the case of United India Insurance Co. Ltd., Vs. Kantika Colour Lab & Ors., reported in (2010) 6 SCC 449,  paragraph 19 and 20, wherein it is observed as follows :-

                “ 19. Contracts of Insurance are generally in the nature of contracts of indemnity. Except in the case of contracts of Life Insurance, personal accident and sickness or contracts of contingency insurance, all other contracts of insurance entitle the assured for the reimbursement of actual loss that is proved to have been suffered by him. The happening of the event against which insurance cover has been taken does not by itself entitle the assured to claim the amount stipulated in the policy. It is only upon proof of the actual loss, that the assured can claim reimbursement of the loss to the extent it is established, not exceeding the amount stipulated in the contract of Insurance which signifies the outer limit of the insurance company's liability. The amount mentioned in the policy does not signify that the insurance company guarantees payment of the said amount regardless of the actual loss suffered by the insured. The law on the subject in this country is no different from that prevalent in England; which has been summed up in Halsbury's Laws of England - 4th Edition in the following words:

"The happening of the event does not of itself entitle the assured to payment of the sum stipulated in the policy; the event must, in fact, result in a pecuniary loss to the assured, who then becomes entitled to be indemnified subject to the limitations of his contract. He cannot recover more than the sum insured for that sum is all that he has stipulated for by his premiums and it fixes the maximum liability of the insurers. Even with in that limit, however, he cannot recover more than what he establishes to be the actual amount of his loss. The contract being one of indemnity only, he can recover the actual amount of his loss and no more, whatever may have been his estimate of what his loss would be likely to be, and whatever the premiums he may have paid, calculated on the basis of that estimate."

 

The determination of the said judgment is squarely applicable to the present case.  When the complainant has not proved the actual loss, he is not eligible to the amount claimed by him.  Such a claim is not legally sustainable.  Therefore, there is no deficiency of service on the part of the opposite party. 

 

             9.  In the result, the Complaint deserves no merit and is liable to be dismissed.  Accordingly, the Complaint is dismissed. 

               

 

R.VENKATESAPERUMAL                                R.SUBBIAH, J.

MEMBER                                                       PRESIDENT

 

 

 

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE COMPLAINANT

 

•     Date         Description of Documents

Ex.A1                             Copy of Standard Fire & Special Perils Policy

 

Ex.A2     24.11.2005         Letters sent by the Surveyor of the

Opposite party

 

Ex.A3     23.01.2006         Letters sent by the Surveyor of the

Opposite party

 

Ex.A4     22.03.2006         Letter sent by the complainant

 

 

Ex.A5     23.03.2006         Letters sent by the Surveyor of the

Opposite party

 

Ex.A6                             Acknowledgement Card

 

Ex.A7     04.04.2006         Letters sent by the Surveyor of the

Opposite party

 

Ex.A8      09.05.2006        Letters sent by the Surveyor of the

Opposite party

 

Ex.A9      30.03.2006        Letter from the office of Insurance Ombudsman

 

Ex.A10   12.06.2006         Letter sent by the complainant

 

Ex.A11    23.06.2006                Letters sent by the Surveyor of the

Opposite party

 

Ex.A12   28.06.2006         Letter sent by the complainant

 

Ex.A13    29.06.2006                Letters sent by the Surveyor of the

Opposite party

 

Ex.A14    29.07.2006                Letters sent by the Surveyor of the

Opposite party

 

Ex.A15   02.08.2006         Letter sent by the complainant

 

Ex.A16                           Delivery Run sheet

 

Ex.A17   04.10.2006         Legal Notice by the complainant

 

Ex.A18    05.10.2006                Letters sent by the Surveyor of the

Opposite party

 

Ex.A19   12.10.2006         Legal Notice by the complainant

 

Ex.A20    19.10.2006                Letters sent by the Surveyor of the

Opposite party

 

    Ex.A21   31.10.2006         Reply Notice

 

Ex.A22    09.11.2006                Letters sent by the Surveyor of the

Opposite party

 

   Ex.A23    08.12.2006         Letter sent by the complainant

 

Ex.A24    15.12.2006                Letters sent by the Surveyor of the

Opposite party

 

    Ex.A25   18.12.2006         Letter sent by the complainant

 

    Ex.A26   29.01.2007         Letter sent by the complainant through

RPAD

 

 Ex.A27                          Acknowledgement Card

 

    Ex.A28   29.01.2007         Letter sent by the complainant through

Courier

 

    Ex.A29   31.01.2007         Letter sent by the complainant through

RPAD

 

 Ex.A30                          Acknowledgement Card

 

 Ex.A31    12.02.2007       Letters sent by the Surveyor of the

Opposite party

 

    Ex.A32   01.03.2007         Letter sent by the New India Assurance

Company Limited

 

   Ex.A33    10.03.2007         Letters sent by the Complainant

 

   Ex.A34    19.04.2007                Letters sent by the Complainant to

Directorate of Public Grievances

 

   Ex.A35    26.04.2007         Reply sent by the Directorate of Public

Grievances

 

 

 

 

 

  

       

 

 

 

 

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE OPPOSITE PARTY

 

•     Date         Description of Documents

Ex.B1     13.02.2007         Survey Report

 

Ex.B2     19.10.2006         Letter from Surveyor to the complainant

 

Ex.B3     09.11.2006         Letter from Surveyor to the complainant

 

Ex.B4     29.01.2007         Letter from Surveyor to the complainant

 

Ex.B5     29.01.2007         Letter from Complainant to the Surveyor

 

Ex.B6     12.02.2007         Letter from Surveyor to the complainant

 

 

 

R. VENKATESAPERUMAL                                        R.SUBBIAH

         MEMBER                                                      PRESIDENT

 

 

Index :  Yes/ No

 

AVR/SCDRC/Chennai/Orders/October/2022